Strengths for investors:

• Covers 7 major commodities with clear regional benefits.
• Madagascar anchors production and processing with large land availability; Comoros for bananas & poultry.
• Total capex USD 188.8 m, IRR 21.5%, NPV USD 33.9 m—meets expected FAO model returns (typically 15–25%)
• Blended finance: USD 97.2 m public, rest private—fits FAO blended financing approach (e.g., match-making at Forum)
• Targets both smallholders and commercial farmers—aligns with investor demand for scale plus inclusivity.
  

This initiative focuses on integrated value chain development for seven regionally important commodities: rice, maize, soybean, onion, banana, red meat, and poultry meat. The intervention spans the African Small Island Developing States (SIDS) in the Indian Ocean—including Comoros, Mauritius, Seychelles—as well as Madagascar and France/Réunion. Production and primary processing of rice, maize, soybean, onion, and red meat will be concentrated in Madagascar, leveraging its vast land resources. Banana and poultry value chains will be developed in the Comoros, contributing to regional food systems transformation.

The total investment is estimated at USD 188.8 million, with USD 148.8 million allocated to Madagascar and USD 40 million to the Comoros. The initiative is expected to yield an internal rate of

return (IRR) of 21.5% and a net present value (NPV) of USD 33.9 million. Public investment amounts to approximately USD 97.2 million. The strategy covers 48,000 hectares, structured into production clusters, and targets both smallholder farmers and large-scale commercial operators with holdings exceeding 250 hectares, aiming to catalyze inclusive, scalable agricultural growth. The Ministry of Agriculture and Livestock in Madagascar has initiated land mapping to identify underutilized, cultivable land.

Key investment components include: restoration of soil fertility on 38,500 hectares of upland crops; irrigation development over 17,500 hectares through dam construction and renewable energy–based groundwater systems; improved access to quality seeds, fertilizers, and pesticides; adoption of climate-smart agriculture; and enhanced market access via rural road networks. Additional investments will focus on post-harvest handling, cold chain development, and agro-processing. Public sector support will strengthen the enabling environment, including digital tools for value chain traceability, extension services, quality control laboratories, R&D, and institutional capacity.

Investor-relevant highlights:

• USD 204 m investment, IRR 30%, NPV USD 271 m is highly attractive and competitive with other sectors.
• Measures like 50% tariff cuts, 80% non-tariff barrier reductions, 4-hour border delays savings—citing WB and IFPRI studies—are credible and clear.
• Listing expected GDP gains (0.3%), poverty reductions (~2.6 m), USD 23 m private-sector time savings adds measurable impact.

The African SIDS of the Indian Ocean, alongside Madagascar and France/Réunion, aim to address systemic trade barriers and unlock regional market potential. Challenges include limited product diversification, low intra-African trade participation, high trade costs (tariff and non-tariff barriers), poor infrastructure, and lack of alignment with the IOC trade regime, which currently benefits only select countries.

This intervention, estimated at USD 204 million, is expected to deliver an IRR of 30% and an NPV of USD 271 million. Benefits include increased rural GDP per capita and gains from a projected reduction of four hours in border crossing times. The investment targets significant improvements in

trade efficiency, with modeling based on World Bank data (2020) showing that a 50% reduction in tariffs and 80% reduction in non-tariff barriers can boost the region’s GDP by 0.3%, benefiting the rural population of this area of around 19 million people.

The initiative will also enable an estimated USD 23 million in private sector savings from reduced border delays. According to the World Bank (2020), implementation of the AfCFTA (ZLECAf) in this region could lead to a reduction of extreme poverty by 780,000 people and moderate poverty by 1.8 million. The project will finance trade facilitation infrastructure, regulatory harmonization, digital trade systems, and policy coordination platforms. It aims to create a coherent, competitive trade bloc that leverages comparative advantages across the region while improving resilience and market access for producers and exporters.